9911796707
TMI Blog2012 (1) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... ed cost of acquisition 240250 X 519/125 9,97,518 Sale consideration received 31,00,000 Less: Indexed cost of acquisition 9,97,518 Taxable capital gain 21,02,482 3. The assessee has invested out of sale consideration in the purchase of a new flat at J-2, First Floor, South Block, Patteswarar Park, Dr.Ramasamy Lay out, Velandipalayam, Coimbatore, for a cost of Rs. 21,53,250/-. The assessee executed agreement for the purchase of this new house on 22.1.2007 with Patteswarar Constructions. But the flat was completed in the year 2008 on 29.9.2008. The payment for the purchase of flat was made in the following manner: 15.11.2006 Rs. 1,00,000 18.01.2007 Rs. 4,00,000 19.03.2007 Rs. 4,00,000 27.08.2007 Rs. 7,00,000 18.01.2008 Rs. 2,60,000 28.07.2008 Rs. 1,00,000 29.09.2008 Rs. 1,93,350 Total payment Rs. 21,53,250 4. As per section 54(2) of the Income-tax Act, 1961 "The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilized by him for the purchase or construction of the new asset befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer. Hence, the learned CI T (Appeals) ought to have held that the Appellant is eligible for the exemption of the entire Capital gains since this amount has been actually appropriated towards the new Residential House. 3. The learned C I T (Appeals) ought to have taken into consideration the fact that having entered into an agreement with the Builders on 22.01.2007 and having been specifically allotted a Residential Flat bearing No. J 2, First Floor, South Block, the Appellant has acquired the right and title over the new Residential house. The learned C I T (Appeals) failed to consider the fact that the undivided share of the land on which the flat is built for the Appellant, has been actually registered by a Sale Deed dated 22.01.2007. Further, the Appellant had made payment in advance to the Builder. Taking into account all these facts into consideration, the learned C I T (Appeals) ought to have appreciated the fact that the Appellant has met the requirement of Section 54, getting entitled to the deduction of entire Capital gains. Having agreed for payments to the builder in instalments within the financial year the balance money has to be treated only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(Appeals) under the head capital gains amounting to Rs. 12,02,482/- and hold that the entire Capital gains is exempt under Section 54 and render justice to the Appellant. 5. We have considered the rival submissions and have perused the entire material available on record. As per the ld. A.R, Shri R.Mahadevan, the assessee has got actually constructed a residential house by utilizing the capital gains arose from the sale of earlier house within the period permitted u/s 139 of the Act. It was argued that the beneficial provisions like section 54 of the Act have to be liberally interpreted in favour of the assessee after seeing the intention of the Legislature embedded in this provision which ordained utilization of capital gains proceeds in the residential house only within the time provided u/s 139. According to the ld. A.R, the Department is trying to read the provisions of section 54(2) with reference to section 139(1) of the Act in order to restrict the relief admissible to him. The ld. A.R has relied on various decisions and has also filed written submissions. On the other hand, the ld. DR has controverted these submissions of the ld. A.R by stating that what is referred in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residential house, the exemption was allowable. In this case, the Tribunal observed that the purpose of section 54F(2) requiring the deposit of unutilized fund is not for depriving the assesse of the use of funds but only for avoiding the rectification of the assessment by bringing to tax the amount, which had been earlier claimed as exempt by reason of reinvestment. We find that the Board has in its Circular No.495 dated 22nd September 1987 at paragraphs 26.1 and 26.2 stated that this is the purpose of bringing in the amendments in sections 54, 54B, 54D and 54F requiring investment in a capital gains account scheme. 9. In the instant case the appellant has apparently satisfied the ultimate objective of the section by investing in a residential house by way of construction within the time allowed u/s 54. What the appellant has failed to do is to make an investment in the capital gains account scheme as required u/s 54(2) within the time allowed for furnishing the return u/s 139(1). This the appellant contends is only a technical breach. The appellant apparently intended to invest in a residential house which is obvious from the fact that he acquired the land within a short time a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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